Wholesale Ways to Get Profits

The advantage obtained by wholesalers is from the difference in price between the prices of goods purchased from producers and the prices of goods sold to retailers.

As we know, wholesalers will buy products in large quantities from manufacturers in order to get discounts or discounts.

They will make money by selling these products to retailers at prices that are higher than the prices they paid to the producers, but still at prices that are lower than those that can be obtained directly from the retailers to the producers.

As a simple example, let's say there is a retailer who buys 100 earphones per month to sell at his shop and maybe he has to spend as much as 100 thousand rupiah per unit if he buys directly from the factory.

If the earphones are sold at 120 thousand rupiah per unit by a retailer, he can only get a gross profit of 20 thousand rupiah per unit.

However, there are wholesalers who buy 50,000 units of earphones from the same manufacturer and can get a cheaper price, which is 40,000 rupiah per unit.

If the wholesaler sells to the retailer for 80 thousand rupiah, then the wholesaler can earn a gross profit of 40 thousand rupiah per unit of earphones.

Meanwhile, a retailer who buys from wholesalers and sells to consumers at a price of IDR 120,000 will get a gross profit of IDR 40,000, more than buying directly from producers.

This example is the simplest example in which there may be various other factors involved in it, such as buying, selling, distribution, etc.

Thus our explanation about wholesale. So, we can conclude together that wholesalers are intermediaries between producers and retailers in the market. The difference with retail is that wholesale sells merchandise in large quantities while retail, meanwhile, retail sells its merchandise in units or containers.

The advantage obtained by wholesalers is from the difference in price between the prices of goods purchased from producers and the prices of goods sold to retailers.

However, whether it's wholesale or retail, the profits that have been obtained must be recorded in the income statement properly, precisely and neatly. Even though it is indeed difficult to do, this bookkeeping activity must still be carried out in order to ensure the benefits that can be achieved.

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